Transgender-Inclusive Health Care: Law and Company Policies

Employers must periodically evaluate their employee benefits packages for compliance under federal and state law. One often overlooked area is transgender-inclusive benefits.

Some states have strong healthcare protections for transgender individuals. Other states explicitly allow insurance companies to refuse gender-affirming care. To make sure your healthcare benefits and policies comply with state and federal laws, talk to a labor and employment lawyer.

Understanding Transgender-Inclusive Healthcare

“There has been a huge push for offering transgender health benefits, including gender-affirming care,” says employment attorney and benefits expert Malaika K. Caldwell. Traditionally, many companies excluded these services from their medical plans. However, Caldwell says that’s changing fast. “Many companies are going back to these plans and revisiting, from an employer’s perspective, what coverage their employees will have going forward.”

In recent years, many states have banned or restricted gender-affirming care. Other states have legal protections that prohibit transgender exclusions in healthcare benefits, including New York, California, Minnesota, and the District of Columbia. “If you have a company that falls under [a latter] state law, that demands a fully insured plan and inclusive benefits.”

Transgender-Inclusive Healthcare Coverage

In its 2020 case, Bostock v. Clayton County the U.S. Supreme Court ruled that Title VII’s prohibition of employment discrimination on the basis of sex includes sexual orientation and gender identity. Employers can’t discriminate against transgender employees.

Federal employee benefits laws do not specifically address transgender-inclusive healthcare. However, there is no mandate or penalty for not offering certain transgender-related health services.

Under the Affordable Care Act (ACA), large employers must offer affordable health insurance to full-time employees and their dependents. At a minimum, health insurance plans must provide minimum essential coverage. The Mental Health Parity and Addiction Equity Act (MHPAEA) requires employers who offer mental health coverage to make it comparable to other medical coverage in their health insurance plans.

Some states mandate larger companies to have health insurance coverage for gender reassignment surgery. However, the majority of companies fall under a self-insured medical plan.

Corporate Equality Index

The Corporate Equality Index (CEI) is a national ranking system that identifies cultural competency and gender equality among employers. The Human Rights Campaign (HRC) selects the best places to work for LGBTQ+ equality. While not a legal requirement, equality rankings may be beneficial to companies that wish to be at the forefront of inclusive employee relations.

“To be included in the index,” Caldwell says, “companies must offer transgender-inclusive benefits within their healthcare benefits packages. So, there is a push for companies to update these plans to get on the list of this index.”

Four Key Criteria for the Corporate Equality Index

The CEI looks at a lot of different employment areas, and the standard is high. In its most recent report, 765 companies earned a 100 percent rating from the HRC. Employers featured in this report took concrete steps to ensure greater equity for LGBTQ workers and their families in the form of comprehensive policies, benefits, and practices. The CEI rating criteria have four key pillars:

1. Non-discrimination policies across business entities
2. Equitable benefits for LGBTQ+ workers and their dependents
3. Supporting an inclusive culture
4. Corporate social responsibility

The Importance of Getting Benefits Right

Employee benefits and health plans are often the second-largest budget item for companies after salaries. Worker benefits are a vital tool in attracting and retaining quality candidates to your business. “Things like this index are a great way to pull in more diverse and stronger workforces,” says Caldwell.

To successfully navigate the ever-changing landscape of employee benefits law, employers should turn to legal counsel. Contact an experienced labor and employment law attorney for legal advice. For more information, see our overviews on labor law, employment law for employees, and employment law for employers.